plus the virgin islands. but your chances of winning, not exactly great, slim to none. this is the largest jackpot but the largest payout ever was mega millions, $656 million back in march. but it happened then. thanks for being with me. i'm brooke baldwin at the cnn world headquarters here in atlanta lt let's go to wolf blitzer in louisiana. "the situation room" starts now. happening now, congress comes back to work but the clock is ticking. unless lawmakers make a deal, automatic spending cuts and tax increases are just a matter of only a few weeks away for everyone. i'll ask a top member of the republican leadership if there's any room for serious compromise. and if you own a home, deductions that save you money every year could be changing or simply going away. we're taking a closer look. and ballpoint pens that hide poison needles and poison

bullets. they sound like props in a cold war era spy movie. but they're part of a real assassination plot. we have details. i'm wolf blitzer. you're in "the situation room." we're just 36 days away from the painful across-the-board spending cuts and tax increases people here in washington are calling the fiscal cliff. today, we have new proof that people across the country not only are aware of what's going on, they're very, very worried. our new poll shows 68% say the country will face either a crisis or major problems if the cuts in taxes aren't avoided. and a whopping 77% say their personal financial situation will be affected by a failure to solve the fiscal cliff problem. despite this nationwide sense of

urgency, there's only a little talk of compromise right now as lawmakers return to washington. our congressional correspondent, kate bolduan, has been working her sources on capitol hill and what's going on. stakes are enormous right now. what's going on? >> they were away for a week. staff was supposed to be working. but lawmakers are arriving back in town with no real whisper of an imminent breakthrough at the moment to avoid this looming series of tax increases and spending cuts that could very well damage the economy. but the air of compromise among some notable republicans is definitely grabbing attention. the republicans' comments quickly caught fire. >> i will violate the pledge, long story short, for the good of the country, only if democrats will do entitlement reform. >> a pledge you signed 20 years ago, 18 years ago is for that congress. the world has changed and the economic situation is different. >> i'm not obligated on the pledge. i made tennesseans aware, i was just elected, that the only

thing i'm monitoring is the oath that i take when i serve when i'm sworn in this january. >> reporter: gop lawmakers bluntly stating to alert the fiscal cliff, they're ready to break from grover norquist and the pledge he's got most republicans to sign to never raise taxes. norquist waste nod time hitting back on cnn's s"starting point" >> it doesn't pass the laugh test. if you want to go to your voters and say, i promised you this and i'm breaking that problem, you can have that conversation with them. but you don't have an argument with me. you've made a commitment to your voters. >> reporter: the question, will more republicans rebel against the pledge? republican and democratic aides tell cnn despite the compromising talk it won't have much impact at all on the fiscal cliff negotiations. there's little evidence of progress from staff level talks over the thanksgiving break and no hints from senate leaders just back in town. >> the senate has spoken and president obama has spoken.

he's promised he will not sign any bill to pay for handouts to the wealthiest 2% of americans. i only hope house republicans have been listening. >> we've been responsible even as we've remained firm on this point, no tax increases now for promised spending cut that is won't materialize later. the american people have seen that game before and they won't be fooled again. >> reporter: over at the white house, the talk of breaking the no tax increase pledge got a positive response. >> some of the comments you mentioned are welcome and they represent what we hope is a difference in tone and approach to these problems. >> bottom line, as we always say, talks continue here in washington. the white house says the president did speak with speaker boehner and senator reid over the weekend to touch base on this very issue. as one republican aide put it to cnn, the fact that they are still talking is progress.

but a democratic aide said they don't have staff had you hadling in a room going over spreadsheets which is where they need to get to hammer out a deal. what they're doing now is they're at the dancing stage of this negotiation. >> a lot of folks are saying it's not the republicans in the senate so much will be the problem for the obama administration, but republicans in the house of representatives, especially those from the tea party movement and others will be a serious problem. >> what was an important group of republicans during the debt ceiling debate while this election has changed the arithmet arithmet arithmetic, republicans in the house will be key to this negotiation. the two men that need to hammer out this deal, just like it was over the summer, is still president obama and spooeseaker boehner. >> i don't think there's any doubt the president will have his democratic base on board. the question is, will boehner have his republican base on

board? will he be able to bring those in? >> those talks continue. >> we'll find out. both congress and the white house certainly under increased intense pressure right now to make a deal. our new poll shows voters are getting rather impatient. let's bring in our chief political analyst, gloria borger, who's also working this. new poll numbers. who's going to get the most blame if there's no deal? >> let's start by saying first of all that you have a very skeptical public you're dealing with. but our new poll did ask the question, who would be more responsible if we head over that fiscal cliff? and as you see there, more people, 11 points, will blame the republicans. but i pulled out in sort of doing a deeper dive of the number of independent voters. look at that. independents whom we learned in this last election are really republican-leaning voters but they're kind of disenchanted, 43% of them would blame the republicans. again, only 32% blame the question.

the republican-leaning independents, these the problem for speaker boehner and the republicans in the house. those are the voters they need to come back into the republican ranks, which is why you have this softening of the tone that we've been hearing over the weekend, in style, if not in substance, at least not yet. >> and where is the american public as far as the president's role is concerned? >> well, the president has his own tricky situation. just been reelected, he has to prove that he's a strong leader. he's got his liberals saying to him, we're not going to take those entitlement cuts. he's got those house republicans he's got to deal with. we asked the question, is president obama doing enough to cooperate with republicans? and you look at this, it's about a tie given the margin of error here. so the president has to prove that he can also make overtures to the republican party that are

realistic, that they may be willing to accept while balancing the concerns of his liberal base, which after all, got him reelected to the presidency, wolf. so this is really a leadership test out of the box for president obama. >> has the public's attitude toward washington softened at all? >> what do you think? the answer to that is, absolutely not. we asked the question, how people expect washington officials to behave. take a look at this. responsible adults, 28%. spoiled children, 67%. i think that tells you about all you need to know about what the public thinks about washington, d.c. >> and when we describe washington officials as members of the executive and legislature branch, branches -- >> all of them. all the children of washington. there's plenty of blame to go around. >> spoiled children. >> maybe they won't play this time are if they got a deal, resolve these issues, threw in the debt ceiling so you don't have to go through this battle again in february or march,

raise the debt ceiling now so that the country can move on to some critically important issues, creating jobs, strengthening the economy. >> do you believe in miracles, wolf? >> i'm an optimist. the voters want democrats and republicans to work together. but how much ground will the republicans give? a top member of the house gop leadership is here in "the situation room." we'll talk about that. also, the prospect of a big promotion for the u.s. ambassador to the u.n., susan rice, etch though he's been the target of republican attacks for weeks. up high! ok. don't you have any usefull apps on that thing? who do you think i am, quicken loans? ♪ at quicken loans, our amazingly useful mortgage calculator app allows you to quickly lculate your mortgage payment based on today's incredibly low interest rates... right from your iphone or android smartphone. one more way quicken loans is engineered to amaze. ♪

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cyber monday online, shopping numbers are smashing records. lisa sylvester is monitoring that and other top stories in "the situation room" right now. how are the records doing? >> i think it's safe to say the economy is coming back. early results suggest online sales up more than 25% compared to cyber monday last year. according to ibm's smarter

commerce, smartphones and tablets represent almost a quarter of total sales. individual shoppers spent an average of $423 this weekend. that is also up from last year. the supreme court is ordering a federal appeals court to take another look at obama care and whether it violates religious freedom. a pending lawsuit from liberty university claims that obama care would lead to taxpayer dmrar dollars and funding abortions. china's landed a fighter jet on an aircraft carrier for the first time. china's news agency reports the ship can --

gangnam style is the most watched youtube video ever. it has more than 816 million views. it topped the previous record held by justin bieber. the song is named for a pricey neighborhood in seoul. that is the video that people keep tuning in again and again, in part because they want to learn the dance. >> we want to see you do a little bit of that. can you show me -- >> you want me to shake just like that -- >> you've got the moves. you can do that. >> i'll save that for the commercial break. >> gangnam style. >> gangnam style. >> thank you. the guessing game object who may replace hillary clinton as the secretary of state is in high gear, once again today.

all because senator john mccain just signaled he's open to talking things over with one of the top contenders for the job, the u.n. ambassador susan rice. dan lothian's noticed the change in tone. dan's joining us now with more. what's the latest on the successor for hillary clinton, dan? >> reporter: that's right. this is senator, john mccain, who had been working to discredit ambassador rice, had been digging in on this, criticizing her, prompting the president at his news conference to say, if they wanted to go after anyone, they should go after him. now there's a noticeable shift and senator mccain says he's ready to listen. from threat tong block her possible nomination to south korea south korea to a willingness to hear her out, senator john mccain seems to be dialing back his public opposition to ambassador susan rice. >> i think she deserves the ability and the opportunity to explain herself and her position. >> reporter: another vocal critic, senator lindsey graham,

is still expressing doubts about her but avoided answering whether he would still stand in the way of a rice nomination. >> when she comes over, if she does, there will be a lot of questions asked after her about this event and others. >> reporter: whether the tone is a shift in speaking or more nuanced language, the white house is all ears. >> certainly saw those comments and appreciate them as the president has said and i and others have said, ambassador rice has done an excellent job at the united nations and is highly qualified for any number of positions in the foreign policy arena. >> reporter: does the preside president -- >> i have no announcements. >> reporter: she's widely believed to be at the top of the list to replace secretary of state hillary clinton who's said she will not stay for a second term. ambassador rice came under fire for suggesting the benghazi attack that killed four americans was a spontaneous event. >> what we think transpired in

benghazi is opportunistic extremist elements came to the consulate as this was unfolding. >> reporter: much later, the administration labeled it a terrorist attack, even though officials pointed to early language the president used referencing, quote, acts of terror. republicans pounced, focusing on the possible nomination of rice as secretary of state. >> we will do whatever is necessary to block the nomination. >> i am dead set on making sure we don't promote anybody that was an essential player in the benghazi debacle. >> reporter: we have been reaching out to senator mccain's office all day trying to get them to clarify if in fact the senator intended to soften his stance. so far, wolf, no response. >> any indication when we're going to get an announcement from the president who he'd like to see as secretary of state? >> reporter: nothing yet. i was pressing jay carney on it. there are a whole host of other names as well.

no indication from the white house as to when the president will start rolling out new names. >> they have to have confirmation hearings starting in january. i assume the new senate will do the confirmation hearings as opposed to a lame duck senate. thanks very much, dan lothian, for that. the fiscal cliff could force politicians to finally make some tough decisions. one of the hardest could involve a popular tax break enjoyed by millions of americans. another c, we even reward you for the time you spent there. genius. yeah, genius. you guys must have your own loyalty program, right? well, we have something. show her, tom. huh? you should see november! oh, yeah? giving you more. now that's progressive. call or click today.

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the fiscal cliff means a lot of things are on the cutting block right now, things that used to be sacred cows for a lot of politicians. some involve what was once one of the most dependable of investments, property. lisa sylvester is back. she's talking about possibility

of something very important to a lot of americans could be cut. >> yeah, that's right. what lawmakers are debating, it could have a direct impact on homeowners across the board. and it doesn't matter if you live just off of wall street or smack dab on main street. >> you basically have 270 degrees of pure ocean. >> reporter: amazing views, luxury bathrooms and a gourmet kitchen, the owner of this $8 million penthouse home in coconut grove, florida, is evening tore sell it before the end of the year because of the pending fiscal cliff. unless congress acts by year end, capital gains taxes will go up. for homeowners with a lot of equity in their homes, selling now can make a big difference. >> if you're looking for someone who's selling their property at a $10 million sales price and they have a $5 million cost in the property, there's a potential $5 million profit, capital gains being 5% right now. they're estimated to go up to 25% next year.

so in theory, there's $500,000 savings for both seller and buy tore get the deal done. >> reporter: even if you have an averaged-priced home, the fiscal cliff negotiations could have a major impact on you. congress could limit the amount of home mortgage interest homeowners can write off their taxes. one proposal from the simpson/bowles commission would cap the deduction at $500,000. lawmakers may also limit tax breaks for second homes. distressed homeowners could also see major changes ahead. the mortgage debt relief act, which waives the tax obligation on portions of the mortgage s set to expire at the end of the year. and new estate tax rules will likely kick in. the exemption level drops back down to $1 million from the current $5 million. that's causing a mad scramble to pass real estate and other assets down to children and grandchildren, says maryland estate lawyer gary altman. >> i consider it a feeding frenzy of a tax break that's going to be going away.

>> possibly the worst thing, though, for the housing market would be if there is in compromise and we end up going off that so-called fiscal cliff. then there would be a sharp cut in government spending pushing the economy into recession, raising the unemployment rate and that could push home values right back down. >> the white house released that study earlier in the day saying if we were to go over the fiscal cliff, it could reduce economic growth next year by 1.7%, which is significant. >> there is a lot of reasons for both sides here to compromise because it's something that i think no one wants to see us go back into recession. the economy, whether you look at home values, home sales, it's just coming back. and now to go over to recession again because they can't reach a deal, that would be a really big problem. >> the president and jrn john boehner, hopefully will get it done. i'll ask kevin mccarthy, the majority whip, how far his party will go on raising taxes,

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let's get straight to our "strategy session." joining us are two cnn contributors, donna brazile, joining us from new orleans, and here in washington, the former speechwriter for george w. bush, david frum. this is john mccain speaking about susan rice who could potentially be the next secretary of state if confirmed. listen so how he phrased it over the weekend. >> give everyone the benefit of explaining their position and the actions that they took. i'll be glad to have the opportunity to discuss these issues with her. >> that's a lot softer, obviously, than what he had said

only a couple of weeks or so ago when he said he would do everything in his power to try to block her confirmation if the president nominates here. what's going on here? >> a lot of things came out of susan rice's mouth in the aftermath of the benghazi killings that were not true. and the question is, who put those words in her mouth? were they her own idea or were they placed by somebody else? the record is increasingly showing she was reading notes created for her by other people. whether or not reading notes created for you by other people is a desirable attribute in a secretary of state, it does shift some of the blame for saying things that weren't true away from susan rice. >> donna, weigh in on that. she says she was reading notes that the intelligence community talking points had created for her and she was strictly sticking to that script, which it turned out to be inaccurate. >> well, as you know in the fog of war, we often get -- at least the intelligence community, they've gotten things wrong.

colin powell using unclassified documents got it wrong in the -- before the iraqi war. but, look, i think the important thing is that senator graham, senator mccain, they're walking back some of the hostile comments they've made just a week ago. susan rice is very qualified if the president decides to nominate her to be the next secretary of state. she's had a wonderful tenure at the u.n., not only in dealing with the crisis in iran and north korea and so many other hot spots across the world. i think she brings a lot to the table, her qualifications, her -- she worked in the clinton administration as well. i would hope that if she's nominated, they would give her an opportunity to state her saith case and confirm her as the next secretary of state. >> let me let david weigh in on this part of the question because you worked in the white house -- in the bush white house. you're familiar with what's going on. if somebody goes on five sunday

talk shows and they prepare talking points, if you will, if you're the principal spokesperson making those points, are you obligated to simply read those talking points or memorize them or do you bring your own expertise, your own knowledge to the table? >> it depends on how formidable a character you are. but there's another problem. those talking points didn't just happen to be wrong. they were crafted to be wrong. the obama administration had an embarrassing problem, four dead americans including an ambassador. a lot of suggestions of negligence and lack of preparation. so they were very eager to pin the blame on something else, something else that would deflect blame away from them, which is why they put so much emphasis on the story about the video, this silly video that seems now quite clearly not to have been the cause of benghazi. that was washington covering its behind. and whether susan rice was a principal in the covering or not is unclear. but it was covering. one more thing to donna. susan rice's main qualification for this job is that back in

2008 when most of the democratic foreign policy establishment lined up with hillary clinton, she lined up with president obama. that's why she's got this job, not because she's one of the outstanding foreign policy figures in the united states. >> she worked in the clinton administration. she brings a lot to the table. she's an oxford graduate. she has foreign policy experience. >> that's true of dozens of people. >> let's go back to september 11th. september 11th, there were protests all throughout the arab world and other places across the globe regarding that video. what susan said and she even qualified her statement that morning, she said, there are still more details to come out of this investigation. there are three investigations going on. why in god's name is everybody trying to pin the blame on susan rice for getting the talking points wrong? i don't understand that -- >> i think actually what is happening right now -- >> i'll put her qualifications on the table any day and stand

behind susan rice. >> what is going on right now -- >> it's not just because she embraced president obama in 2008. she worked with honor and distinction in the clinton administration. and if that is her only qualification, look at her record at the u.n., look at the toughness she's had -- >> donna, the president can have whoever he wants. and i'm a believer that the president should have the president's people. if the president's people are politically loyal to him, it's his prerogative and his determination. but that does not alter this crucial fact, which is the story about the video was concocted to avoid embarrassment. and what is interesting -- the reason susan rice is having a little bit of an easier time this week, it's increasingly clear she was not the person who concocted the story. somebody else did. but that doesn't change the fact the story was concocted and it

was concocted as an excuse. >> hold on -- the intelligence community says they wrote up those talking points for her. are you suggesting the national intelligence director, the head of the cia, they were concocting a politically attuned story, if you will, for the u.s. ambassador to the u.n.? >> i don't know who was responsible for it. that is the thing that we are going to discover. >> they said they did it. they said it wasn't a white house decision. >> it would not be unheard up in the annals of the united states to write something to protect themselves from embarrassment. >> i want you to react to some of the assertions, the accusations that have been leveled at senator mccain, senator graham, that there's an element of sexism and even racism inner that opposition to susan rice. do you believe that? >> i know senator mccain. and i don't think he would go

that low. susan rice, as i mentioned, is very qualified to hold this position if the president -- again, i don't want to prejudge what the president may or may not do with regards to susan rice. i think she has served with honor and distinction. and i'm not going to make this about anything other than if the president nominates her, i'm willing to stand behind her and fight because i believe she's a great public servant. >> donna brazile, thanks for coming in. appreciate it. david frum, congratulations to you, your book "why romney lost" now a "new york times" bestseller. good work. the fiscal cliff has more than a few republicans rethinking their opposition to tax and the anti-tax pledge that once kept them honest might not be worth more than the paper it's written on. what's going on here? we'll speak with the number three republican in the house of representatives, kevin mccarthy is here. the majority whip. thanks for coming in.

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as the automatic spending cuts and tax increase that is make up the so-called fiscal cliff get closer and closer, only a few weeks ago, some top republicans are signaling they're ready to abandon their pledge never to raise taxes or cut deductions. that pledge pushed by the conservative activist, grover norquist, has been part of republican orthodoxy for several years which makes statements like these so surprising. listen -- >> i will violate the pledge, long story short, for the good of the country, only if democrats will do entitlement reform. >> i'm not obligated on the

pledge. i made tennesseans aware, i was just elected, that will only thing i'm honoring is the oath that i served. >> a pledge you signed 20 years ago, 18 years ago is for that congress. >> when i go to the constituents that have reelected me, it is not about that pledge. >> eric cantor, the majority leader in the house of representatives. joining us now, kevin mccarthy, the majority whip, the number three republican leader in the house of representatives. thanks for coming in. >> thanks for having me. >> are you ready to jump on that bandwagon and violate that grover norquist pledge? >> i think what the american people want is to see the problem solved. what we have, we spend more than $1 trillion more than we bring in every year. we have to solve that problem. we have a weak economy. we borrowed 8% of our gdp for less than 2% growth. we need overall tax reform. the president says he wants a balanced approach. he wants revenues plus spending cuts.

the speaker has said, there's a way for revenues, not to raise the rates because that harms the economy and small business but close special interest loopholes to get the revenue. but also the president needs to show where the cuts are, show us where we can cut back on government growth to have that balance -- >> he says he's ready for some entitlement cuts in medicare, cuts in medicaid, some reforms that would effectively result in some cuts in the rate of growth, if you will. but what i hear you saying is that you're ready for increased tax revenue but not through raising the tax rate for the upper income, for the highest income bracket? >> what you find is when you raise rates like most economists will tell you, you harm the economy. two years ago when the democrats controlled all, we were at the same place. >> if you raise rates to 39.6% for those families earning more than $250,000 a year, those families and those small businesses did quite well during the years of the clinton administration when the rate was

39.6%. why not go back to that? >> the economy was stronger then. president obama who had nancy pelosi as speaker two years ago said don't raise the rates in a down economy. it hurts it. >> the economy's a little stronger now than it was two years ago. >> i don't know if you've been out there in the economy -- you see a lot of people underemployed, half of college students coming out, a lot of them can't find jobs. we're at our lowest point of new start-ups in 17 years for small business. and that's the greatest growth to economy. when you look to the future, we're in a weak position. >> what about raising it from 35% to 36% or 37%? >> what does that get you? >> $31 billion for the next year. you want to sit down and find a place to control government spending and raise more revenue. if the goal is to raise more

revenue, what is the best way to do that at the same time protecting the economy? so if you're able to gain more revenue by closing special loopholes and limiting them and keeping the rate down so you have better job growth, isn't that a better outcome? >> the president says -- and he makes this point repeatedly, the white house put out a whole report on it today, the 98% who make under $250,000 a year, just let them continue to have the same tax rates. don't make their tax rates go up at the end of the year. take them out of this negotiation. renew the tax -- make sure they keep that rate that they have right now. why not do that? >> the goal is to solve the problem. that doesn't solve the problem -- >> but it would remove 98% of the middle class families -- >> but talking about the growth of government, that 98% is still going to be worried about the economy we have, the debt that we have. let's solve this problem once and for all -- >> can you do that in three weeks? >> what we can do in three weeks is set up where we reform some

of the government spending, we bring more reform in, that's what republicans are putting on the table to the president. if the president would now say, he wanted 2.5 cuts for every $1. show where the cuts are and then set a framework so you have overall tax reform next year where the committees can work on it, then you're going to get a robust -- >> a two-part system -- >> yeah. >> do you include raising the debt ceiling because that's going to come up in february or march? they have to raise the debt ceiling. do you make that as part of the deal now. >> i think that's too much at this time right now. >> because you're going to have another battle in february and march if you don't include it now. >> you can set a framework up where you deal with the issues, overall tax reform, you make cuts in government, bring more revenue in. put us on a bath to growth but at the same time protecting small business and get this economy moving again. when more people are working, more revenue is coming in.

>> 97% of all small businesses, the president says, wouk exempt from any tax increase if you passed the legislation. >> most accountants will tell you the majority of small businesses run as an "s" corporation. small business is at its low es percent in 17 years of now start-ups. small business creates more jobs than large corporations. you don't want to harm more of small business. let's sit at the table, find places you close those loopholes, bring the president the more revenues he asked for. while keeping an economy able to grow. >> this new poll we released today, is the gop doing enough to cooperate with president obama. 24% say yes, 70% say no. politically speaking, it will appear to a lot of americans you're simply trying to protect the rich. >> well, that's not the case when you see if we're trying to solve a problem.

we put revenues on the table, started right off with that. but the president says he wants a balance. where are those 2.5 cuts for every dollar you take? >> are you ready to accept that in terms of revenue increases -- >> we provide the revenue already there. we're sitting at the table. that poll, if i recall correctly, also says 70% want to see the president offer spending cuts and work with republicans even if it means going against his own beliefs. >> what do you think about this idea of lindsey graham pitching over the weekend of capping deductions at $30,000 or $40,000 a year, whether it's charitable contributions, home mortgage deductions. and he says you could raise $1 trillion. >> those are different options that could be on the table. you would gain more revenue that way than raising the tax rates. but you have to sit at a table and start talking about it. >> are you sitting at that table now? have those negotiations really

started in earnest? the clock is ticking. >> i know the speaker's started from the very beginning after the election. he's been down to the white house, met with the president. they talked over the weekend as well. but the one thing you have to remember here, you can't solve this problem just by more revenue. we're going to have to control the spending of government. and that's why the president even admits he needs 2.5 times as much as you get if revenue. that's what we need to start talking about. the president's offered nothing. we got three weeks ago. i haven't seen anything yet. have you heard him talk about it? >> talk about medicare cuts or medicaid cuts, entitlement -- >> therefore loopholes you can limit from all different prospects. but we talk a lot about that revenue side, this whole conversation's been more revenue than where can we find the government cuts? that brings compromise. that brings a solution. but more importantly, that solves -- >> you want to raise the eligibility for medicare from 65 to 67? >> there's all sorts of things

that could be on the table. that's all worth discussing. i think the american people want to see -- at the end of the day, you want a solution. not to continue the problem. >> will there be a deal before december p 1st? >> republicans want a deal. that's why we came to the table first. >> kevin mccarthy, thanks for coming in. >> thanks for having me. >> good luck. we're counting on you guys to get this done. >> we'll be there. an alarming accusation against the syrian regime. rebels' innocent children are being caught in the crossfire. what's going on here? we'll have a live report. anncr: some politicians seem to think medicare and...

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our next report contains disturbing images that may not be suitable for all audiences, especially for children. it comes from syria where ten children are said to have been killed when a cluster bomb landed close to where they were playing. it's not the first alleged use of cluster units by the regime of president bashar al assad. it may be one of the most appalling. >> reporter: these disturbing images show what happens after a children's playground is hit, according to activist, by a cluster bomb. refugees with nowhere else to hide, apparently hit by a single deadly device dropped by a jet. some cluster bombs released smaller explosives to cause maximum devastation against softer targets. what do these children have to do with anything, yells one man? at least ten children killed, according to activist, who said they found the remains of the bomb around the tiny village of

deir al assafir. cnn can't verify his pictures or claim that cluster bombs were used. but activist images from the scenes show cluster munitions. but activists say civilians have been hit before when the regime has responded to key rebel successes like at this important air base not far away. >> there is no logic at all attacking such a small village crammed with women and children like that. it's like they're saying, look where we're going to do. >> reporter: the injuries to these children, horrific, no matter what the device used. the toll on the youngest and easiest to kill, constant and unspeakab unspeakable. nick payton walsh, cnn, beirut. >> the brutality in syria continues. much more in our next hour on what's going on. meanwhile, nothing about north korea should surprise any

of us but the discovery of a covert program to assassinate dissidents in the south is stunning. and the weapons are straight out of a 007 movie. make even this old container smell fresh? take a deep breath. describe the room that you're in. i think just like a big, open space. like i'm hanging the sheets on the line. and it smells really fresh, man. let's take your blindfold off. oh! [ both laugh ] super-weird! oh, is it febreze? yeah. ohh, how about that? febreze has anti-clogging technology that keeps it smelling fresh, even after 30 days. febreze. breathe happy. side by side so you get the same coverage, often for less. that's one smart board.

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you'll be a perfect fit. let's get to work. north korean spies certainly operate in the shad dose. but when we see what they're up to, the plots can be stunning. the latest was a plan to kill defectors in cold blood. cnn's paula hancocks was given this exclusive look. >> reporter: an assassination attempt foiled. a north korean spy is arrested on the streets of seoul. this was a year ago. and this is the first time south

korean intelligence officials are showcasing the weapons, exclusively to cnn. how does this work? >> translator: this poison needle was made to look like a ballpoint pen. there is a tube inside here. in order to activate it, we have to twist it towards the right three to four times and then press the top part like this. >> reporter: if you're shot by this pen, what happens to you? >> translator: it would cause muscle paralysis very quickly, which would lead to suffocation and death. >> reporter: the second pen shoots a poison-filled bullets which penetrates the skin. the powdered poison is then released. these pens look like they belong in a james bond movie. is it new technology or is this quite old, quite basic technology? >> translator: these pen weapons are not new. north korean spies have had this technology for about ten years.

but this flashlight is new. i've never seen this weapon before. if you look at the front, there are three holes. there was a bullet in each hole and here is the trigger. this is currently loaded and dangerous. two bullets remain. >> reporter: forensics experts fired one bullet to test the gun disguised as a flashlight. it was accurate and deadly and almost impossible to identify as a weapon. when police arrested the would-be assassin, he was carrying all three weapons, none had been fired. this man was his target. defector and anti-pyongyang activist park, renowned in south korea for sending anti-regime propaganda leaflets across the border in balloons. he was due to meet the would-be assassin who claimed he wanted to fund his activism. south korean intelligence agents stopped him at the last minute. >> translator: i didn't believe they would try and kill me on the crowded streets of seoul. i thought the national intelligence service was

overreacting. >> reporter: we show park the weapons intended to kill him. he hadn't seen them before in such detail and seemed shocked. >> translator: you would notice the gun, but these weapons are so innocuous, you could easily kill someone. i would have been killed instantly. >> reporter: park knows he's at the top of the hit list. having seen the weapons intended to kill him, he says he knows there will be more assassination attempts but he will not stop his activism. paula hancocks, cnn, seoul. and you're in "the situation room." happening now, protests, strikes and bloodshed, egyptians fear their new president is becoming a new dictator. urgent talks and an urgent new warning from the united states. air travel nightmare, how the looming financial crisis could close airports in the united states, cut the ranks of controllers and security

screeners and ground millions of passengers. and how did the confetti drifting over new york's thanksgiving parade come to include social security numbers, license plate numbers and details from police reports? we want to welcome our viewers in the united states and around the world. i'm wolf blitzer. you're in "the situation room." tensions heading toward a tipping point in egypt where thousands of mourners today marched through cairo's tahrir square for the funeral of a man killed in protest against the president. mohamed morsi is accused of a massive power grab, slashing the authority of judges, barring courts from overturning his rulings. the secretary of state hillary clinton today told her egyptian counterpart that the united

states does not want to see power concentrated in one set of hands. even as president morsi meets with egypt's highest judicial body which has blasted his actions. let's go live to cnn's reza sayah in cairo watching what's going on. lots of people in tahrir square. we have live pictures of that as well. i understand that morsi actually met today with some of these top judges? >> reporter: he did, wolf. a lot of people eager to see how president morsi responds to this political crisis if he would back down under mounting pressure, if he'd make some concessions. it seems forn now the answer is no. many viewed one of his decrees as essentially disabling the judiciary by banning anyone -- any authority, even the judiciary, from questioning, appealing any decisions he made since june.

the question was going into this meeting, would he scale back on some of those decrees? would he make concessions to the judiciary? he did not. in a statement by the president's office, he said, look, the position that we're in is that these decrees are designed to move forward the democratic process and to avoid any remnants of the mubarak regime. in other words, the judges from undermining the process. so for now, wolf, the position of the president remains clear that he's not backing down to the pressure and he's sticking with those controversial decrees that he announced last week. >> as you know, the muslim brotherhood just said they were canceling the pro-morsi demonstrations on the streets of cairo. what does that actually mean? are they backing away from him? what's going on? >> reporter: i think we need to be careful not to read too much into that particular decision, the canceling of the 1 million-man demonstration they had on tuesday.

remember, the muslim brotherhood is an extremely powerful organization, maybe the most powerful political movement in egypt right now. and i think many are looking at this decision to cancel this demonstration at face value. a lot of people were concerned about possible violence, the opposition factions also have their demonstrations scheduled for tomorrow. so they didn't want any clashes. if anything, the muslim brotherhood n morsi, appear to be more confident than ever. earlier today, we spoke to a top adviser and he talked to us about the conflict. i get the impression that you're not too bothered by those protests, that you don't feel there's a problem in egypt right now. >> we have in problems in egypt. but if this is one of them, we have a political problem. >> reporter: do you see this as a crisis as what's happening? >> it's a problem. >> reporter: not a crisis? >> i think it is a problem. >> reporter: how do you solve this? >> dialogue. >> reporter: they want dialogue. they want concessions.

they want mr. morsi to rescind his decrees. what kind of concessions are you willing to make? . >> the decision is up to the president. not up to us. we are ready for dialogue with our -- >> reporter: are you prepared to consider rescinding, adjusting some of those decrees? >> decree is up to the president, accepting it -- we may have some reservations. but as a whole, we must take a step forward, not backward. >> reporter: so two big headlines coming out of egypt today, first off, president morsi not scaling back his decrees, sticking with them and the muslim brotherhood calling off their 1 million-man demonstration scheduled for tomorrow. >> we'll have a lot more on this story coming up later this hour. thanks very much, reza sayah, from cairo. other news we're following, including news from afghanistan as the united states looks to

wind down its troop strength in afghanistan, plans are being made for a u.s. military force to stay on there even after the 2014 handover to afghan authorities. our pentagon correspondent chris lawrence has been looking into this. what's being considered for a u.s. role in afghanistan after the scheduled pull-out? >> reporter: if you thought 2014 was going to be the end of u.s. troops' involvement, that does not look to be the case. although publicly pentagon officials say it's too early, our source, a u.s. official is telling us that there are several options being discussed inside the pentagon, one of which is to keep about 10,000 u.s. troops in afghanistan past 2014. a small number of those troops would be special operations forces that would be dedicated to counterterrorism missions. the rest of the forces would either be training or advising

afghan troops or providing medical support and air support, things like that. there are other options with fewer troops, some with more troops. but this one fits right in the middle of that spectrum. he also told me that one of the deal-breakers when it came to iraq, immunity for u.s. troop, in other words, that they wouldn't be prosecuted under local laws like afghan laws. he doesn't feel that's going to be as big of a hurdle in afghanistan as it was in iraq. he says president hamid karzai is much stronger in his ability to say, we want u.s. troops here. he says one of the things that's going to be key is the afghans' demand for a lot of money in the later years, say, five, six, seven years out, how much money the afghans will want in return, wolf. >> because the president kept saying during the campaign, as you know, chris, that all u.s. troops would be out of

afghanistan by the end of 2014. there's still about 70,000 u.s. troop there is right now. and most of them are presumably going to be there for the next two years or so, costing taxpayers roughly $1 billion a year to keep the troops there. would this be seen as a violation of the president's commitment to the american people to get all troops out of afghanistan by the end of 2014? >> reporter: well, it depends how you read the president's previous statements, wolf. it also depends on how things change in afghanistan. we know that the u.s. wanted to keep some troops in iraq but ultimately that deal fell apart because of, among other things, the immunity clause in trying to come up with an agreement. but you're going to see these troops doing something very different, wolf. already there are changes going on that will radically change how the mission in afghanistan is conducted.

up to eight army brigade combat teams are going to be replaced by the middle of next year with these new security force assistance teams. got a completely different mission. it's much more geared towards training and advising, not combat and counterinsurgency. one of those units has already deploy this had month. you're going to see up to eight of those units replace those combat units. so a big change, wolf. they're not only going in with that different mission. but they're about half the size of the combat brigades that they're replacing. you're already going to start seeing those changes in 2013. >> we'll see what happens. thanks very much for that, chris lawrence at the pentagon. the nation may be just 36 days away from hurtling over the so-called fiscal cliff. a financial crisis that would be triggered by automatic spending cuts and tax increases, a deal to head off this nightmare scenario would take a lot of

compromise here in washington over the next few weeks. and some top republicans are softening their tone when it comes to tax. even eric cantor seemed to back away from the no new taxes pledge orchestrated by the activist grover norquist. listen to this -- >> i will tell you when i go to the constituents that have reelected me, it is not about that pledge. it really is about trying to solve problems. >> we're going to respond to the electorate that reelected this president, but at the same time, we say we weren't elected to raise taxes. we want to go and help people get back to work. >> joining us now, ryan lizza, the washington correspondent for "the new yorker" magazine. you listened carefully to what eric cantor had to say. does that appear to be a softening from his position? >> it does appear to be. of all the republicans who have come out and moderated their position a little bit on taxes,

cantor's is the most interesting and the most revealing. remember, in 2011, it was folks to boehner's right, people like cantor and paul ryan who put pressure on boehner not to cut a deal with obama who said, let's try to win the election instead. that was the -- that was the conservative approach. and boehner seems to be positioning himself as at least -- according to his latest comments, as much more of a conciliator -- >> if there is a softening on the part of the republicans, especially house republicans, sit because of the election? >> i think it has to be. the two big policy decisions republicans in congress have to make after the election is on taxes and immigration. those are the two issues that are coming down the pike for them. taxes is first, immigration will be second. and the two issues, where if you look at the exit polls, they lost on both those issues to president obama. you hear a lot of conservatives

in the more intellectual class of conservatives saying, get off the idea of tax rates basketball the end-all, be-all. and some conservative leaders are listening in congress. >> bill crystal, an intellectual leader of that conservative wing, if you will, he said, a lot of democrats in hollywood get to benefit millionaires and republicans shouldn't necessarily go to war on raising the tax rates for the wealthy. >> you have bill crystal and another who said it's a major problem for the republican party. you have people like david frum who's saying a similar message. it's starting to penetrate. at the same time, you're going to see a backlash from the grover norquists and the still very, very strong anti-tax wing of the party. >> you could see a little civil war going on among the house republican caucus, those who are going to betray that pledge, those who are going to stick by it?

>> absolutely. and boehner's got a decision to make, does he allow a huge chunk of his caucus -- does he allow a deal to go through where he loses a big chunk of his caucus. >> does the president lose democrats if he makes big cuts in entitlement spending? >> obama has more control over the house democrats than boehner has over the house republicans. >> despite the election? >> despite the election. most people believe obama can go to the liberals and say, you've got to vote for this. >> a lot of liberals are not going to vote for any significant cuts in medicare, for example. >> remember in 2011 when it was revealed what obama was negotiating with boehner, the liberals weren't happy abit. but the white house is confident they could have push that had deal through. but a lot of liberals feel like after the election, obama owes them a little bit more. >> the question is, can boehner get a majority of his republicans on board, can the

president get a majority of the democrats on board? if they do that, they'll have a deal. >> it's ironic because it strengthening boehner's position if he goes to obama and says, i've got a lot of these really crazy conservatives pressuring me. it makes boehner's position a little bit stronger in the negotiating table if he can say, i've got these people on my right pushing me and i need a little -- i need to deliver something for them. >> you predict a deal or no deal? >> i predict a deal. the consequences of no deal are too dire. >> let's hope you're right. >> it will be messy and ugly to get there. but there will be a deal. a warning from the white house that middle class families could pay thousands more in taxes next year. i'll speak with the top white house economist, alan krueger, he's here in "the situation room." all energy development comes with some risk,

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to shape our curriculum. so that when you find the job you want you'll be a perfect fit. let's get to work. when we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.

it's all part of the president's push to extend tax rates for the middle class. joining us now, alan krueger. alan, thanks for coming in. >> thanks for having me. >> i was intrigued by something i heard from senator lindsey graham yesterday on the sunday talk show circuit. he was talking about perhaps an alternative to raising tax rates. listen to this. >> i are cap deductions. if you cap deductions around the $30,000, $40,000 range, you can raise $1 trillion in revenue. and the people who lose their deductions are the upper income americans. >> does that sound like a reasonable compromise to you? instead of raising the upper income tax rate from 35% to 39%, cap deductions at $30,000 or 40 0ushgs th

$40,000? >> it's hard to look at it that way. the president put forward a proposal that limits deduction and raises the top rates, all together raises about $1.6 trillion. >> if there's a way to keep the top rate at 35%, cap the deduction, eliminate loopholes, tax credits, do you think the white house would be open to that? >> we're certainly willing to look at such proposals but we haven't seen a realistic proposal that raises enough revenue. bear in mind, there are certain purposes of some of these deductions such charitable contributions where one has to be concerned about greatly reducing the amount of money that's going to worthy charities. >> as far as the other part of the coin, cutting spending, especially entitlement spending, i want to pick your brain on how far you're willing to go in that

area, as far as medicare cuts, social security, raising the retirement age, all of that is on the table, right? >> the president would forward a balanced approach, a balance between raising revenues on the highest income earners and cutting spending. we're in a situation where we need to consider all kinds of options. >> so that's on the table right now, everything's on the table -- do you think you can get this done in the next three weeks or so? >> these are solvable problems. the most important step congress can do right now is extend the middle tax cuts. that's why we put out a report today showing what would happen if they weren't extended. middle class familying would face around a $2,000 tax increase. that will have negative consequences for the economy. >> i want to get back to that capping deductions. is there any flexibility on the white house standpoint about capping deductions, whether with home mortgage interest rates or

with charitable contributions? would either of those or both of those be on the table? >> if you go back to the president's very first budget, he had a proposal which limits deductions for upper income people to 28% rate. i think that's an economically very sensible way to approach this problem and he still has include that had in his budget. >> you're concerned about charitable contributions suffering as a result -- how do you deal with that? >> well, at a 28% rate, there's still an advantage to making those charitable contributions a considerable tax advantage. >> is timothy geithner leading the negotiation with congress on these issues? >> secretary geithner is playing a lead role but others are very much involved, including the chief of staff and rob nabors. >> i don't know if you saw the story in "the wall street journal" saying there were some republicans on the hill irritated with the white house chief of staff.

really want to deal with geithner as opposed to jack lou. did you see that story? >> i saw the story. i work for secretary geithner. now i meet every day with jack lou and i can tell you, they're wonderful people to work with, first-rate policymakers. people whose values and judgment i trust enormously. >> as part of this deal, assuming there's a deal before the end of the year, avoiding going over the so-called fiscal cliff, are you also including raising the nation's debt ceiling, because it's got to come uby february or march, i take it? and everyone doesn't want to go through this nightmare once again then. >> that's absolutely right f. you look back at what happened last year, it was a completely self-inflicted wound. congress didn't raise the debt ceiling in an orderly fashion and it literally brought the economy close to its knees. it's taken us a while to build back confidence since then. consumer confidence is now back

up to a five-year high. so it's important that we address the debt ceiling and the other issues facing us at the end of the year. >> in your report -- i read it -- that was release this had morning, i didn't see any mention to extending the payroll tax cuts. if it's not extended, that's going to lapse and cause a lot of pain for a lot of middle class families. what's your thinking on that? >> in our report, we focused on the effect of not extending the middle class tax cuts. the senate has passed an extension on the middle class tax cuts. the congress could pick that up. that will provide a lot of certainty and help the economy going forward. if not, we calculate that gdp growth will be reduced by 1.4 percentage points next year. >> what about the payroll tax cut? does the white house want that to lapse, go away or to be extended? >> well, as you know, wolf, there are a lot of tax provisions that are expiring at the end of the year. first and foremost, i think

congress should pass an extension of the middle class tax cuts. there will be time to consider other proposals like the payroll tax cut and also just want to make sure everyone is aware the president fought very hard for the payroll tax cut a year ago and that payroll tax cut has been helping to bolster households, helping to support the economy in the past year. >> looks like no matter what happens, he's going to go away. it doesn't look like it's part of the negotiations, am i right? >> as i said, there are lots of provisions that are expiring at the end of the year. the president said this should be on the table. there will be lots of tax provisions, including the payroll tax cut, to consider. >> alan krueger, the chairman of the council of economic advisers at the white house, alan, thanks very much for joining us. >> thanks very figure me, wolf. secret confidential information revealed in the confetti at this year evenings macy's's thanksgiving day parade. find out what spectators discovered just ahead. stay with us. you're in "the situation room." .

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bangladesh, remembering more than 100 clothing factory workers killed in a horrific fire. lisa sylvester's back monitoring that and the other top stories in "the situation room." what happened? >> the government of bangladesh has announced an official period of mourning to begin tomorrow and it's ordering an investigation into the deadly weekend blaze. meanwhile, at least another ten people were injured just today in a new fire that broke out at a different garment factory. no one was killed in that fire. bangladesh has more than 4,000 garment factories that make clothes for a number of top brands, including some right here in the united states. and the fbi is calling the arrest of one of its ten most

wanted fugitives, quote, a big deal. authorities held a news conference today after finally catching up with joe signs in mexico. he had been on the run for 14 years. the suspect is accused of killing four people in the los angeles area and the person who tipped off police will get a $100,000 reward. the u.s. military is recalling some body armor plates used by special operations forces in combat due to a manufacturing defect. it says the problem was only detected in a small percentage of plates and no service members were killed or wounded as a result. special operations command is issuing an older generation of plates until a full inventory of replacements is manufactured. and this could have been a bombshell evidence in the casey anthony trial. and the orange county sheriff's office is calling it an oversight. cnn affiliate wkmg reports that prosecutors and investigators missed important computer evidence that showed the florida

mom may have researched how to kill her 2-year-old daughter. on the afternoon of caylee's death, someone reportedly searched the term "foolproof suffocation" on anthony's computer. the user also red about poison and suffocation, which is how prosecutors claimed anthony killed her daughter. a jury acquitted anthony last year of first-degree murder in the 2008 death of her toddler. pretty interesting. they're saying it was an oversight. >> there's nothing they can do about it now. >> she was tried, she was acquitted. that's pretty much the end of it at this point. >> that would have been bombshell evidence. >> indeed. >> thank you very much. after a stunning power grab by egypt's new president triggers widespread protests, should the obama administration now threaten to withhold financial aid to egypt? stand by.

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the growing crisis in egypt where the new president, mohamed morsi, has given himself broad new powers, bringing tens of thousands of protesters back into the streets. you're looking at live pictures from tahrir square right now. they're camping in. joining us to discuss is fooad. president mohamed morsi first took control of the muslim brother hed, of parliament, then the military, got rid of the general, now trying to take control of the judiciary. now some say he's trying to become a dictator. is he? >> when someone says he's above the law, that his decisions ever since he became president last june are not subject to review, when someone suspends basically the constitution, the working assumptions on the land and promises he will return to it the people seven months later, egyptians have every right to worry.

they have every right to worry this may be the classic worry about the islamist, the muslim brotherhood would run away with the practice and the constitution and the power of the land. and when the man himself had 51.7% of the vote when he was elected, this is a bit much. >> because he says it's temporary, that's his word, temporary. an egyptian who used to head the international atomic energy agency says in effect that mohamed morsi is not only a dictator but he's becoming like pharaoh. you hear it from other egyptians as well. >> yes, it's an arresting image. and there are many egyptians. i've talked to several liberal egyptians who are almost, believe it or not, hoping for a military intervention. this is the dilemma of egyptian liberalism. if it's going to somehow arrest the power and the reach of the

muslim brotherhood, it has to rely on the army. >> you mean the military coup, is that what you're talking about? >> in some attempts. i think we have to step back and look at these decisions and announcements of morsi and what he was trying to to do. what's interesting, there was an egyptian academic who said, there was a disease in egypt, but this is not the right remedy, an egyptian epidemic. the judiciary will run away with it. there is a discontent in the country with the judiciary. the judiciary, for example, was supposed to try these people responsible for the murder of 850 protesters in the events of tahrir square. none of that happened. none of that happened. and there was great unease with the prosecutor. there was a prosecutor that the tahrir square people, the liberal people, did not take to. and so morsi removed him.

and that actually was a very popular decision. >> the state department spokesperson spoke about what's going on in egypt today. i'll play a little clip. >> we want to see this issue resolved in awaa that meets the standards and principles that we've support all the way through. >> what should the u.s. doright now to make sure those standards and principles are honored? >> well, mohamed morsi was a cunning man. look at the timing. he did this attack, if you will, on the constitution and the attack on the judges right after he brokered the deal between israel and hamas. so he was already rending services in the international community and then asking for a license at home. it's really basically a page from the book of hosni mubarak. i think in washington, there is great uncertainty, what to do with the islamists in power.

this is not just from this crisis of november 2b 22nd, this crisis of the last week behind us. this has been the case since the fall of the dictatorship of hosni mubarak, what to do with the islamists in egypt, what to do with the islamists in tunisia and what to do with the rise of the islamists in the region as a whole. >> over the weekend, senator john mccain said, our dollars will be directly related to the progress towards democracy. if you add up all the economic and military assistance the u.s. gives egypt every year, it's about $1.5 billion. should that be used as leverage to try to get egypt back on this democracy road? >> well, i usually have great deference to the opinions of senator mccain. i see things on national security the way he does. i think the egyptians operate on the assumption that they are too big to fail, they are too big to be cut out, if you will, of washington. and their relationship with israel and their place in the

region somehow grants them an exemption from these pressures of congress. i don't think congress will go through. i think the egyptians have always played that game. they've played it for a very long period of time. and in that way, morsi really takes up after the mubarak regime, how to get american treasure and how to snub american wishes. >> one quick question on syria, because i know you've studied it. you've just written a book about it. turkey has asked for and been granted a nato patriot air defense missiles. they're clearly worried about rockets and missiles coming into turkey from syria from the regime of bashar al assad. how worried should turkey be about engaging with syria in an actual war? >> wolf, the turks are very worried. and the turks are very disappointed. i've spent a fair amount of time in turkey this last year or so. they're very disappointed in washington's abdication. they feel that washington has left them holding the bag. the prime minister has always felt that he had kind of an

inside relationship with president obama. but now the turks are left where they are. they are left with this running, shooting campaigns with the syrians. they're left with well over perhaps 120,000, 130,000 syrian refugees and they feel they have been left alone. the patriot missiles are the least we can do for them. >> thank you. >> thank you, wolf. could air travel cost you more if the country goes over that so-called fiscal cliff? up next, the doomsday scenario some experts are now painting. i'm breathing better. so now i can be in the scene. advair is clinically proven to help significantly improve lung function. unlike most copd medications, advair contains both an anti-inflammatory and a long-acting bronchodilator working together to help improve your lung function all day. advair won't replace fast-acting inhalers

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. the looming fiscal crisis

may not only hit your wallet hard, it could also have huge implications for the next time you want to fly. here's cnn's sandra endo. >> reporter: this is air travel now, cut that by $1 billion and it could ground millions of travelers. >> in the 56 years of the faa's history, there's not been anything that has been as threatening as sequestration. >> reporter: the automatic spending cuts which may kick in after the first of the year would run deep for the faa. the aerospace industries association paints a doomsday scenario. 250 small airports may have to close and 1,500 air traffic controllers laid off. a former faa administrator heads the lobby group. >> faa is not one of those places that if you are looking for smart cuts, you'd go. it's an operational agency, it's a safety agency. and you sure don't want to see cuts made there. it really does force us to look at the fact that we could see

our system become a much diminished system, operating on the kind of schedules you're used to in the third world, not here. >> reporter: she said 3,000 employees could get pink slips. >> we've made a number of plans -- >> reporter: the head of the tsa says they could handle the potential cuts. >> the bottom line is to keep the front-line security operations in full force, to keep the movement of people and goods moving smoothly. >> reporter: the airlines we talked with wouldn't share their doomsday plans, referring us to a lobby group which said, no one knows what might happen should sequestration occur. small comfort for the public looking to buy tickets. what do you think that's going to do for the airline industry and airports and security here? >> oh, gosh, make everything a little more difficult. >> reporter: are you worried about that in terms of travel for yourself? >> yes, of course. travel and travel costs.

>> i travel a lot. so anything that messes with it is a problem. >> reporter: what's your message for congress? >> let's get together and figure this out were the worst case scenario may sound grim. but many industry leaders are taking a wait-and-see approach. all eyes are on this lame duck congress, which has about six weeks to figure out where the budget acts will fall. sandra endo, cnn, washington. was the palestinian leader poisoned to death? what investigators are hoping to learn from his remains. u trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.

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the palestinian leader yasser arafat died nearly a

decade ago after a sudden and severe illness. now after weeks of preparation, investigators are trying to find out if he was poisoned. here's cnn's fred pleitgen. >> reporter: the mystery around yasser arafat's death is almost like a james bond movie. now, a team of scientists is going to analyze am ssamples of body and looking for polonium. even eight years after yasser arafat's death, the circumstances remain a mystery. was the palestinian leader poisoned? a team of international scientists will try to find clues working behind this blue tarpoline exhuming the body and taking samples or analysis. >> translator: i consider it a painful necessity to reach the truth in the death of president yasser arafat. >> reporter: he died in 2004 after a short and severe

illness. doctors were never able to determine the cause of death. even as his body laid to rest, rumors began to serk late yaszer arafat might have been murdered. >> a recent investigation found traces of polonium and used assassination attempts in the past on some of the palestinian leader's belongings. now experts from france, switzerland and russia will examine arafat's remains, also looking for a possible concentration. the process will only take a few hours but samples will then be independently analyzed in labs in russia, switzerland and france and it's unclear when the first results will be made public. in his lifetime, and even after his death, yaszer arafat remains a powering figure for palestinians. but denight wanting to know the circumstances behind his illness, not everyone agrees with the exhumation. >> translator: i don't support the process this man says

because the opening of the grave is disrespectful and insulting. >> i have no objection to exhuming him as long as it is done by professionals and in full respect of the leader. >> of course i'm against it, he says. it is insulting to martyr and to the palestinian people. >> reporter: the palestinian authority accused israel of being behind poisoning of arafat, a claim the israeli government refuses to comment on. it is not clear if it can be traced on the remains eight years after the palestinian leader's death but if heightened levels are found, the next question for investigators would then be, who's behind yasser arafat's death? wolf, if polonium is found inside the body, that's going to raise a whole new set of questions and most possibly lead to another very, very long investigation. wolf? >> thank you. social security numbers, birth dates and sensitive police reports all included in the

confetti raining down on the parade. when's going on? stay with us.

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let's take a look at this hour's hot shots. here in washington, a crane lowers a christmas tree on the lawn of the u.s. capitol. in england, queen elizabeth meets with a mouflaged soldier. sniper in this particular case. in iraq, children hold candles in a ceremony. monaco, people display a quilt in honor of men and women who died of aids. hot shots, pictures coming in from around the world. spectators at the annual macy's thanksgiving day parade in new york city got much more than bargained for showered with

confetti made of confidential police information. let's bring in cnn's mary snow in new york with details. so what happened here, mary? >> well, you know, wolf, if it's not for a college student this may have gone unnoticed. police in nassau county just outside new york city invest gatding how the sensitive information wound up at the parade and why the documents weren't shredded properly. ♪ mixed in with the likes of spiderman and spongebob as new york's thanksgiving day parade is shredded police documents with personal information flung along the route. it is the subject of an investigation. parade sponsor macy's says it uses multicolored confetti, not the white shredded paper first brought to light by college student ethan finklestein. he went to a station saying he gathered the strips after one landed on his friend's jacket.

>> she looked at it. picks it off the jacket and says ssn and then there's a number and written like a social security number. and we're like, that's really bizarre. >> reporter: he says he found social security numbers for police officers along with birth dates, the symbol of the nassau county police department was in the pile with the mention of mitt romney's motorcade, presumably tied to the last presidential debate in nas kauai county. ethan's father saul with his son stunned and pointed it out that remans along the sidewalk. >> if somebody had the wrong intentions and they were diligent, they could put together names with information that shouldn't be in the hands of the public. >> reporter: he says detectives from the nas kauai county police department came to his sunday night after he reached out to them. the department said in a statement, the nassau county police department is very concerned about this situation. we will be conducting an

investigation into this matter as well as reviewing our procedures for the disposing of sensitive documents. >> it seems foolish. i mean, hopefully it is not more than foolish. >> now, a nassau county police department spokesperson says the department is offering help to those whose identities may have been compromised. wolf? >> mary, do police know what documents these actually were? >> they say as far as they can tell they believe it's part of administration documents and not part of ongoing investigations. >> pretty embarrassing stuff. mary snow working the story for us, thank you. an you're in "the situation room." the country is teetering on a fiscal cliff right now. and now a rare sighting of an endangered species here in washington. we're talking about compromise. some powerful republican lawmakers are rethinking their anti-tax pledge. i'll talk about wit the number

three gop leader in the house of representatives. plus, how iran is rearming hamas in the wake of its latest battle with israel. i'm wolf blitzer. you're in "the situation room. " republicans contemplating tax hikes. democrats weighing entitlement cuts. positions largely unthinkable not that long ago. they're taking shape going toward the fiscal cliff w. the new year, severe tax increases and severe spending cuts will automatically take effect unless congress and the white house reach a debt reduction agreement and there are signs each party's sacred cows may be up for slaughter. i want to pick your brain on how far you're willing to go in that

area as far as medicare cuts, social security, raising the retirement age, along those lines. all of that is on the table, right? >> you know, the president put forward a balanced approach, one that has a balance between raising revenues on the highest income earners and cutting spending. we near a situation where we need to consider all kinds of onyxes. >> kate baldwin is here. she's got more on what's going on. kate, what is going on? >> you know, there was a break last week for thanksgiving. but talks were supposed to be continuing in these ongoing negotiations. however lawmakers are arriving back in town with no whisper of an imminent breakthrough at the moment to avoid this looming series of tax increases and spending cutting that could seriously damage the economy but the air of compromise among some notable republicans is definitely grabbing attention. the republicans' comments quickly caught fire. >> i will violate the pledge,

long story short, for the good of the country only if democrats will do entitlement reform. >> a pledge signed 18 years ago, 20 years ago for that congress. the world changed and the economic situation is different. >> i'm not obligated on the pledge i made tennesseeans aware. i'm honoring the oath i take when i serve when i'm sworn in this january. >> reporter: gop lawmakers bluntly stating to avert their fiscal cliff they're ready to break from the pledge and governor norquist got to sign to never raise taxes. norquist wasted no time to hit become. >> doesn't pass the laugh test so that's an odd position. if you want to go to the voters and say, i promised you this and i'm breaking my promise, you can have that conversation with them. but you don't have an argument with me. you've made a commitment to your voters. >> reporter: the question now, will more republicans rebel against the pledge? republican and democratic aides

tell cnn despite the compromising talk it won't have much impact at all on the fiscal cliff negotiations. there's little evidence of progress from staff-level talks over the break and no hints of senate leaders just back in town. >> the senate has spoken. and president obama has spoken. he's promised he will not sign any bill that mortgages our future to pay for handouts to the wealthiest 2% of americans. i only hope house republicans have been listening. >> we've been responsible even as we've remained firm on the point. no tax increases now for promised spending cuts that won't materialize later. the american people have seen that game before. and they won't be fooled again. >> reporter: over at the white house, the talk of breaking the no-tax increase pledge got a positive response. >> some of the comments you mentioned are a welcome and they represent what we hope is a difference in tone and approach

to these problems. >> bottom line, talks continue. the president called both speaker boehner and speaker reid over the weekend as one republican aide put it the fact they're still talking is progress when it comes to washington. a democratic aide, though, saying they don't have staff huddling in a conference room going over spreadsheets and where they need to get to to strike a deal. at this point, they're doing more dancing. >> joining us, kevin mccarthy, the number three republican leader in the house of representatives. thanks very much for coming in. >> thank you for having me. >> are you ready to violate that grover norquist pledge? tie american people want the see the problem solved and what we have, we spend more than a trillion dollars than bring in every year and got to solve that problem. we have a weak economy. we borrow 8% of our gdp less than 2% growth and what we need is overall tax reform. now, the president says he wants a balanced approach. he wants revenues plus he wants

spending cuts. speaker's been down there and say there is's a way for revenues. note to raise the rates because that harms the economy and small business but close special interest loopholes, get the revenue, but also what the president needs to do, show us where the cuts are. show us where we can cut back on government growth to have that balanced approach. >> he said he's ready for cuts in medicare. cuts in medicaid to result in cuts in the rate of growth, if you will. but what i hear you saying is you're ready for increased tax revenue but not raising the rate for the highest income rate. >> raising rates you harm the economy. the economy's weak. remember, two years ago when the democrats controlled all, we were at the same point. >> if you raise rates from 35% to 39.6%, which is what it was during the clinton administration, for those famili families earning more than $250,000, the families and small

businesses did quite well in the years of clinton administration whether the rate was 39.6. why not go back to that? >> the economy was stronger then. remember, two years ago when the democrats controlled all? what did the president say? president obama who had nancy pelosi as speaker and reid said don't raise the rates in a down economy. the president says, now, too, looking for that revenue. >> the economy is a little stronger than two years ago. >> i don't know if you've been out there. >> take a look today -- >> a lot of people underemployed, unemployed. half of college students coming out can't find a job. we're at the lowest point of new start-ups in 17 years and the greatest growth to economy and looking to the future, we are in a weak position. >> what about raising it 35 to 37 or 36%? >> you raise that. what's that $31 billion for a year? >> a billion here and there, after a while it's real money. >> you want to find a place to control government spending and

raise more revenue. if the goal is raising revenue, when's the best way to do that and protecting the economy? able to gain more revenue closing special loopholes and limiting them and keeping the rate down so you have better job growth, isn't that a better outcome? >> the president says and he makes this point repeatedly, the white house put out a whole report on it today. you know what? the 98% who make under $250,000 a year, just let them continue to have the same tax rates. don't make their tax rates go up at the end of the year. take them out of this negotiation. renew the tax -- make sure they keep that rate that they have right now. why not do that? >> goal is to solve the problem. >> you get 98% of the middle class families -- >> you do nothing about the dwroet of government. that 98 prgs is still worried about the economy we have, the debt that we have. let's solve the problem once and for all. >> can you do that by three

weeks? >> i think what we can do in three weeks is reform some of the government spending, we bring more revenue in. that's what republicans are putting on the table that the president asked for and the president saying he wanted, what, two and a half cuts for every one dollar, show where the cuts are and then a framework for overall tax reform next year where the committees can work on it and then going to get a robust -- >> two-part system. >> yeah. >> what you can do. >> you can't solve all the problems in three weeks. >> do you include raising the debt ceiling? that comes up in february or march. do you make that as part of the deal now? >> that's too much at this time right now. what i would say -- >> another battle in february or march if you don't include it now. >> you can deal with the issue. overall tax reform. you make cuts in government. you can bring more revenue in. you put us on a path to growth and same time protecting small business and get this economy moving again with more people working, more revenue coming in.

>> president says 97% of all small businesses exempt from any tax increase to pass the legislation the senate passed and sign it in to law. >> most accountants will tell you it's an s-corporation's you'd raise the rate over 43% based upon the other tax coming with obama care. small business at the lowest percent in 17 years of new start-ups. small business creates more jobs than large corporations. so if you look towards the future, we have a weaker point so you don't want to harm more of small business. sit at the table. find places you close those special loopholes. bring the president the more revenues that he asked for and republicans have put that on the table now. while keeping an economy able to grow. >> what do you think about this idea of lindsey graham pitched over the weekend of capping deductions at $30,000 or $40,000 a year, charitable contributions or home mortgages? >> those are different options that should be on the table.

you talk about and gain revenue but you got to sit at a table and start talking about it are you sitting at the table now? have those negotiations started in earnest? the clock is ticking. >> i know the speaker started from the very beginning after the election. he's been down at the white house, met with the president. i know they talked over the weekend, as well. one thing to remember here, you can't solve this problem just by more revenue. we're going to have to control the spending of government. and that's why the president even admits he needs two and a half times as much as you get of revenue. that's what we need to start talking about. the president offered nothing. we have three weeks to go. now a time -- >> said nothing? >> i haven't seen anything. have you heard him talk about it? we have talked a -- >> medicaid or medicare cuts. >> there's loopholes to limit from different prospects but the thing to find is we talk a lot about that revenue side. this whole conversation has been more revenue than about where can we find the government cuts and we should spend the same amount of time on that, as well.

that brings compromise. that bring s a solution and solves the problem. >> raise the eligibility of medicare 65 to 67? >> all sorts of things could be on the table. that's all worth discussing and i think the american people want the see a solution. at the end of the day you want a solution. >> will there be a deal before december 31st? >> looking for republicans, we want a deal and why we came to the table first. >> kevin mccarthy, the majority whip in the house of representatives, thank you for coming in. >> thank you. >> we're all counting on you to get this done. >> that's great. homeowners should be paying very close attention to this entire fiscal cliff drama. what's at stake for homeowners all across the country. plus, cnn exclusive. secrets of a would be assassin now revealed. with verizon. this monday online only. get the droid razr by motorola in cranberry, free. or a white 7-inch

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hurry in and try five succulent entrees, like our tender snow crab paired with savory garlic shrimp. just $12.99. come into red lobster and sea food differently. and introducing 7 lunch choices for just $7.99. homeowners should be paying attention to the looming fiscal cliff, especially the mandatory tax hikes to kick in january 1st

unless congress and the white house reach a deal to cut the debt. it turns out some real estate transactions may be particularly hard hit. cnn's lisa sylvester is joining us now with details. what do viewers across the country need to know right now? >> wolf, what lawmakers are capitol hill debating right now could have a direct impact on homeowners across the board and doesn't matter just off of wall street or smack dab on main street. >> you basically have 270 degrees of pure ocean. >> reporter: amazing views, luxury bathrooms and a gourmet kitchen. the owner of this $8 million penthouse home in cocoa grove, florida, eager to sell it before the end of the year because of the pending fiscal cliff. unless congress acts by year end, capital gains taxes go up. for homeowners with equity, selling now makes a big difference. >> selling the property $10 million sales price an they have

a $5 million cost, in the property, there's a potential $5 million profit capital gains being 15% right now and estimated to go up to 25% next year so in theory there's a half a million dollar let's say savings for both seller and buy tore get the deal done. >> reporter: even if you have an average-priced home, possible outcomes of negotiations could have a major impact on you. congress could limit the amount of home mortgage interest homeowners can write off on the taxes. one proposal from the simpson bowles commission cap the deduction at $500,000, half of what it is now. lawmakers may limit tax breaks for second homes and mayor changes ahead. the mortgage debt relief act which waves tax obligation on the portions of the mortgage being forgiven is set to expire at the end of the year. and new estate tax rules will likely kick in. the exemption level drops back down to $1 million from the

current $5 million. that's causing a mad scramble to pass real estate and other assets down to children and grandchildren. says maryland estate lawyer gary altman. >> like a feeding frenzy of tax break. everyone's worried at the end of the year there's only a small amount which is a million dollars that will pass free of estate tax and gift tax so they want to lock in the exemption this year before it goes away. >> you know, possibly the worst thing for the housing market would be if there's no compromise and going over the so-called fiscal cliff and then a sharp cut in government spending. that could push the economy in to recession, raising the unemployment rate and, of course, that could push home values back down, wolf. >> nightmare scenario for a lot of folks. thank you for that report. still ahead, new york city puts an eye popping price tag on the damage from superstorm sandy and mayor michael bloomberg is asking washington for help.

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massive price tag on the damage of the superstorm sandy. kate's here. she's got more on that. some of the day's other stories. >> massive price tag of superstorm sandy. new york mayor michael bloomberg putting damage to his city at $19 billion and skl for federal aid to cover about half of that cost. after subtracting private insurance payouts and fema insurance, the governor says it's more than the state can handle alone. >> and i know that the taxpayers of new york cannot shoulder this burden and i don't think it's fair to ask them to shoulder this burden. this nation has a long history as you saw in the other

supplementals of helping others at a time of need and this state and this region of the country have always been there to support other regions of the country when they needed help. well, we need help today. cuomo goes on to say that getting the money through taxes would ruin the state. very close by state, seems to be settled. new jersey governor chris christie is running for re-election. he filed the papers to set up the campaign and raise money. with a huge rebuilding task, christie says the public needs to know he's in it for the long haul. christie's response to sandy given the outspoken republican quite a big boost. a new poll show it is approval rating from 56% to 77% after the storm. few politicians that would love that approval rating. human error blamed for a huge explosion that destroyed a strip club on friday. state fire officials say a you timty worker punctured a gas

line because the markings were incorrect. look at that. more than 20 people, many of them firefighters. the explosion felt as far as 10 miles away. and a record lottery jackpot is up for grabs. you probably already know this. the temp prize in wednesday's powerball drawing estimated at $425 million. that's $60 million more than powerball's previous jopt jacket and more than $200 million short of the biggest lottery payout in u.s. history. that was a whopping $656 million, mega millions jackpot won by 3 people this past march. before you even ask, yes, i will share my winnings with you. >> you already -- you did? >> when i win on wednesday -- >> 400 plus million -- >> we'll do the quick payment. >> i'll buy a ticket. how about you? >> a hundred or so. i'm kidding! got to increase the chances. >> 100 tickets? >> still come to work the next day. >> of course. >> of course. >> we love what we do even with

extra $200 million or $400 million, million. other important news we're following. hamas weapon stockpiles depleted last week and sources telling cnn weapons once again flowing in to gaza thanks to iran. we have details. got live tiles so all my stuff's always right there in real-time. it's like the ultimate personal assistant. but i'm me, and me needs handlers. so i hired todd to handle it for me. todd, gimme that hollywood news! what's happening on twitter? you're trending! yes! i like you todd. i don't like todd because he's quitting. but now i'm hiring a new todd and it could be you. [ male announcer ] go to workforwill.com and try live tiles, that deliver what you want in real time. only from at&t. rethink possible.

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the smoke barely cleared. >> but iran is believed to be replacing the weapons lost by hamas. the correspondent barbara starr is working that side of the story for us. barbara, what are you picking up? >> reporter: kate, everyone is looking very positively upon the notion that the hostilities of the last several days are over for now, but the question is just that, what is iran doing to back hamas for the next round?

iranian port of bandar abba under severe vsurveillance. use smuggling weapons in to gaza. washington and tel aviv are sharing that intelligence. one senior u.s. official tells cnn, iran is finding ways of resupplying hamas. u.s. and israeli officials say from bandar abbas ships make the way in to the red sea and dock in sudan. some unload missiles and parts and smuggled in to sinai and then in to gaza's tunnels. others dock further north before entering gaza. iran wants several routes open, especially if there's a coming crackdown. >>s is not so easy to get things in to gaza unless you use the tunnels and what the egyptians are doing with the agreement is moving toward arrangement where

what goes in to gaza goes in above ground being inspected by somebody and may make it hard tore get weapons in to gaza. >> reporter: but the israeli military spokeswoman told wolf blitzer iran is not letting up. >> it tried to push more and more rockets inside the gaza strip. >> what happened to them? >> we're monitoring that. but the question is -- >> what does that mean? >> we know that iran is deeply involved with hamas inside gaza. >> reporter: ichiro suzusraeli s say it's almost impossible to shut down the tunnels because of millions of dollars in economic activity. trusting egypt with sensitive intelligence about weapons smuggling could be risky. >> after all, if there is an emerging alliance of hamas and the government of mohammed morsi, you have to have been very careful of what you tell the government of mohammed morsi about hamas of fear of going back to hamas.

>> reporter: now, the outgoing israeli defense minister barack will be here at the pentagon later in the week and counting on this issue to be at the top of his list. hamas for its part says it will continue to try to get weapons. and we reached out to the iranian government and not able to get a response from them. zmat. >> barbara, you talk about it nearly impossible to shut down the tunnel where is the weapons are coming in this part but is there anything more to be done on the part of the u.s. or israel to try to slow the flux of weapons? >> reporter: the state department points out u.n. resolutions governing iran's ability, legality of exporting weapons. what they want to see the international community, especially the nations in the region like sudan, egypt, crack down more, not let these iranian shipments in to the air space or ports. when cargo comes in, inspect it. get the stuff before going in to

gaza tunnels but that's a smuggling route for decades now. so, it's going to be hard to see how there might be changes any time soon. >> great work. barbara starr at the pentagon, thank you. >> reporter: sure. the united states and most of the world is caught off guard stepping down in jn and leaving politics. as barbara just reported. barack's resignation could hardly come at a more critical time for israel. cnn's brian todd is working this part of the story for us. what do we national correspondent a the decision? >> reporter: it seems to be more about the political maneuverings and the lack of support of the party in the israeli parliament. that's the microbe. but the bigger questions is critical cease-fire just brok brokered and whether israel will strike iran. he's pulling the standard excuse. saying he's quitting in january to spend more time with his family. >> translator: there are many

ways to contribute to society in the country. not necessarily through politics. >> reporter: israeli defense minister ehud barack leaves at a precarious time. while his country holds on to a fragile cease-fire just reached with hamas. analysts say the resignation likely won't affect that. >> the cease-fire will not stand or fail according to presence or absence of any single individual. it's driven essentially by national interests. hamas did not want to incur an israeli ground attack and israelis didn't want to offer one up. >> reporter: but there's another threat to israel, the u.s. and their allies that ehud barack's departure could aggravate. it comes aziz real faces a decision whether to attack iran's nuclear facilities. was ehud barack someone that restrained prime minister netanyahu from going after iran and what happens now? analysts say recently barack did restrain netanyahu convincing him to hold off an attack until

the american elections and beyond. early on, though, they say barack held build netanyahu support among other israeli leaders for a possible strike on iran. >> barack gave netanyahu the security cover to pursue the option when the others wanted more cautious approach. >> reporter: barack could do that because he's israel's most decorated soldier ever and commanded benjamin netanyahu in an elite military unit and spearheaded some of the most daring commando raids and dressed as a woman to kill operatives in revenge for an attack on athletes at the munich athletes. it is that kind of resume, a historical graf it is a, that netanyahu will miss, experts say, if and when he presses harder to strike iran. >> it hurts netanyahu without those security street cred credentials. no one with those security credentials to point to saying, now, go forward. >> reporter: that may mean more

restraint from netanyahu with iran or it may not. ehud barack's departure takes away something else from the equation. analysts say he was the key go between with the obama administration to stick to the wishes of president obama to let sanctions work against iran. now that barack is about the leave, it's not clear who can bring netanyahu back from a possible confrontation if netanyahu decides to attack iran. wolf? >> i know a lot of u.s. officials, obama administration officials had the highest, highest regards for ehud barack as the defense minister and as you point out, he says he wants to spend more time with his family but obviously there's a lot more to his departure than spending more time with his family. >> reporter: clearly is. his party probably won't win any seats in parliament in the upcoming israeli elections and make it hard maybe not impossible for him to remain at defense minister and reports maybe he and netaahu are split over whether to attack iran and

between that and the lack of political support he thought it was the time to go. >> brian todd, thanks very, very much. the last time i interviewed ehud barack he made a point to say u.s.-israeli military to military intelligence to intelligence relations in his opinion and he's been around a long time have never been better and thanked president obama for this. >> high compliments for the president at that point, too. all right. we'll see. still ahead, we have heard all the critics. but big name lawmakers going up against u.n. ambassador susan rice who might be president obama's pick for secretary of state. she's taking action. we have new information, next. [ male announcer ] with 160 more miles per tank,

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all right. this just coming in to cnn. u.s. ambassador to the united nations susan rice will be here in washington up on capitol hill this week to talk about the deadly attack on the u.s. consulate in mbenbenghazi, liby. dan lothian has confirmed this information from his sources. dan's joining us now. dan, what else are you learning? >> reporter: also hearing from a senate source that the ambassador will be meeting with senator john mccain tomorrow morning. we're also hearing that at one of the meetings later this week that mike morell with the cia joining ambassador rice. this comes after senator mccain seemed to be putting a brakes on the harshest criticisms of ambassador rice and the actions in the wake of the benghazi attacks. from threatening to block her nomination as possible secretary of state to a willingness to hear her out, senator john mccain seems to be dialing back his public opposition to ambassador susan rice. >> i think she deserves the

ability and the opportunity to explain herself and her position. >> reporter: another vocal critic, senator lindsey graham, is still expressing doubts about her but avoided answering whether he would stand in the way of a rice nomination. >> when she comes over, if she does, there will be a lot of questions asked of her about this event and others. >> reporter: whether this apparent new tone is a shift in thinking prompted by political pressure or nuanced language, the white house with all ears. >> saw those comments and appreciate them as the president has said and i and others have said. ambassador rice has done an excellent job at the united nations. and is highly qualified for any number of positions in the foreign policy arena. >> the president like to nominate her? >> i have no announcements to make on personnel. >> reporter: she is widely to be at the top of the list to replace secretary of state hillary clinton who has said she will not stay for a second term.

ambassador rice came under fire for suggesting the benghazi attack that killed four americans was a spontaneous event. >> there was a hateful video that was disseminated on the internet. that sparked violence in various parts of the world, including violence directed against western facilities including our embassies and consulates. >> reporter: much later, the administration labeled it a terrorist attack. even though officials pointed to early language the president used referencing, quote, acts of terror. republicans pounced focusing on the possible nomination of rice as secretary of state. >> we will do whatever's necessary to block the nomination. >> i am dead set on making sure we don't promote anybody that was an essential player in the benghazi debacle. >> reporter: during his last news conference, the president was asked about the criticism. he plazed ambassador rice's work and saying if the senators wanted to go after anyone, they should go after him. wolf?

>> dan, thanks very much. let's bring in chief political analyst gloria borger. i assume the meetings to have beginning with john mccain tomorrow morning designed to ease any of the opposition to her con fir mission. >> you think? you think john mccain is just a coincidence? >> no. >> right. well, exactly. and even if she doesn't get the nomination she's got to talk to john mccain. it was clear, over the weekend, he was softening and she decided i think very smartly to take advantage of that softening and what she is going to do i think privately is explain to him just what transpired, when she got the intelligence on the attacks in mbenbenghazi and try to conv him she wasn't any part of cover-up of terrorist activities and the question i'm sure john mccain will be asking then if you weren't part of a cover-up why is it that the cia was giving you information that they knew to be bad? because we have had general

petraeus testify that he believed it was a terrorist attack from day one. >> so, the question is this. there are plenty of republicans out privately thinking it's a losing battle the try to block her. >> they do. >> confirmation. politically, she is a woman. she's african-american. >> that's right. >> does that make sense after the election for them to go after her? >> i talked to republicans about it today. the feeling is why do you want to start off this important year, forget the fact you have the fiscal cliff negotiations going on, but you've also got issues you will have to deal with with iran, gaza, afghanistan, with syria. you've got serious issues to deal with. why do you want to go back and start this way with the bruising confirmation battle which in the end she'll probably get through? why is this a way to start a year when the american public said to you, you know what? let's stop with the partisanship for a minute and get things done and it's xlins believing it would be counter productive for

the party to do this. >> you can see it in dan's piece and it was really a marked shift in tone by senator mccain. >> yeah. >> do you think what you just said is really the overarching reason why there's a softening tone? what do you think? >> first of all, john mccain was very angry and benghazi, clearly. at the end of a presidential campaign. that adds to it. i believe john mccain is a traditionalist when koiit comes the senate and tries to err on the prefer sumpgs of the nominee when that nominee comes up with the senate. i also think there's conservatives, bill kristol over the weekend saying susan rice might be intersvennist than john kerry who's the other potential nominee and maybe take susan rice instead of john kerry. >> when you think of the dynamics on capitol hill and the relationship when from capitol hill to the white house, i mean,

what impact do you think a bruising battle over susan rice would be and the other things they're running on? >> exactly. i mean, you know, you could have a three-ring circus or cut down one of the rings and push it to the side and you have got the fiscal cliff going on. you've got issues that have to do with egypt, foreign aid to egypt. you have gaza. why do you want to have another ring there? and start dealing with this confirmation battle which is as wolf pointed out earlier the optics of a confirmation battle with susan rice. african-american woman. two groups that the republican party did not do very well with i might add in the last election. >> acknowledging they need to do better. >> i don't mean to impugn john mccain or lindsey graham for criticizing her. i think they have their reasons and nothing to do with anything other than benghazi butoptics i republican party is looking for right now. >> something you can't ignore.

>> right. >> see what kind of diplomat she is. i've known her for 20 years. worked in the clinton administration. traveled through africa with her. she's tough, smart. let's see how diplomatic she is meeting with john mccain, lindsey gram, the other republicans. >> you know what? john mccain i would have to say likes tough women. gets along very well with hillary clinton, for example. she is a tough woman. we don't know. maybe hillary clinton some point will get -- >> he can change his opinion. he is the way he is. >> yes. >> that's john mccain. >> wouldn't be the first time. let's see what happens. let's see if the president nominates her. >> might be getting a step ahead. cnn is getting rare access right now in to the weapons of spies and assassins. talking about something that's real and that's next. [ female announcer ] you can make macaroni & cheese

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north korean spies oerpts in the shadows but seeing what they're up to shadows, but we s they're up to sometimes, the plots can be rather stunning. the latest was a plan to kill defectors with weapons that could only come from a spy novel. paula hancocks was given an exclusive look by the south korean authorities. >> an assassination attempt foiled. a north korean spy is arrested on the streets of seoul. this was a year ago and this is is first time south korean intelligence officials are showcasing the weapons exclusively to cnn. >> so, how does this work? >> translator: this poison needle was made to look like a pack of ballpoint pen. there is a tube inside here.

in order to activate it, we have to twist it towards the right three to four times, then press the top part like this. >> if you're shot by this pen, what happens to you? >> translator: it would cause muscle paralysis very quickly, which would lead to suffocation and death. >> the second pen shoots a poison filled bullet, which penetrates the skin. the powdered poison is then released. now, these pens look like they belong in a james bond movie. is it new technology or is this quite old? >> translator: these pen weapons are not new. they've had this technology for about ten years, but this flashlight is new. if you look at the front, there are three holes. there was a bullet in each hole and this is the trigger. this is current ly loaded and dangerous. two bullets remain. >> forensics experts fired one bullet to test the gun disguised

as a flashlight. it was accurate and deadly and almost impossible to identify as a weapon. when police arrested the would be assassin, he was carrying all three weapons. none had been fireded. this man was his target. defector and anti pyongyang activist, renowned in south korea for sending anti regime propaganda leaflets across the border in balloons. he was due to meet the would be assassin who had claimed he wanted to fund his activism. south korean intelligence agents stopped him at the last minute. >> translator: i didn't believe they would try and kill me on the crowded streets of seoul. i thought the national intelligence service was overreacting. >> we showed him the weapons intended to kill him. he hadn't seen them before in such detail and seemed shock. >> translator: you would note the gun, but these weapons are so innocuous, you could easily

kill someone. i would have been killed instantly. >> he knows he's at the top of north korea's hit list and has around the clock peace protection. having seen the weapons intended to kill him, he says he knows there will be more assassination attempts, but will not stop his activism. >> still ahead, an award ceremony sparking global outrage. justin bieber is at the center of it all because of what he wore while meeting the canadian minister. now, the teen pop star is firing back. well, i'll do the shopping... if you do the shipping. shipping's a hassle. i'll go to the mall. hey. hi. y'know, holiday shipping's easy with priority mail flat rate boxes from the postal service. if it fits, it ships anywhere in the country for a low flat rate. yeah, i know. oh, you're good. [ laughing ] good luck! [ male announcer ] priority mail flat rate boxes. online pricing starts at $5.15. only from the postal service.

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says the elderly couple who owns gets permission for demolition because they department think they were getting enough compensation money from the government, so what did the government do? they built a highway right around the house. >> all right. people generally dress up when they receive awards from top government leaders, but justin bieber's choice of attire for a recent event was so unusual it caught the eye of the fashion critics and jeanne moos. >> they may be called overalls, but they sure can leave you underdressed. >> i see, i see, he's drooping. >> when canada's prime minister awarded bieber the medal the other day, he got an online dressing down, so is he a train conductor now?

dressing like an american hill billy. do you know anything about this? >> other than he is dressed inappropriately. >> yeah, he looks terrible. >> was the combination of off the shoulder overalls, backwards cap and neon yellow shoe, but when daily mail echoed a blog that called bieber white trash prince, bieber fired back saying that the ceremony took place in an arena where he was set to perform and had just had a meet and greet. if you expect me to be changing clothes, let alone a suit for that specific time, that's crazy. it wasn't like i was going into his environment. we were at a hockey arena. wow, am i ever white trash. >> i think it's cute. he looks like a teenager. >> so, you're canadian and you don't care. >> no, that's part of his persona. >> nobody wears ties anymore. >> canadian prime minister seen is news tweeting out in fairness

to justin bieber, i told him i would be wearing my overalls, too. on sunday, bieber performed "boyfriend," the halftime show. ♪ was repeatedly booed. we haven't had a fashion mismatch like this since lady gaga met the queen wearing a red latex dress and panda eye makeup. could have been worse. could have met the prime minister wearing sunglasses or leather dropped crotch pants. at least the snake he took to the video music awards didn't slid out from under those overalls. >> it does look like they're coming down. >> new york. >> i think they were definitely going to dimpt parties. >> he's justin bieber. >> quick note, tomorrow, i'll have a one-on-one interview with